Mosaic Company (the) · NYSE:MOS
Mosaic Company (the) — Q2 2017 Earnings Presentation
19 slides from Mosaic Company (the)'s earnings presentation, Aug 4, 2017
Slide 1: Earnings Conference Call – Second Quarter 2017
Presenters: Date: Earnings Conference Call – Second Quarter 2017 August 1, 2017 Joc O’Rourke, President and Chief Executive Officer Rich Mack, Executive Vice President and Chief Financial Officer Laura Gagnon, Vice President Investor Relations The Mosaic Company
Slide 2: Forward Looking Statements
MOSAIC CONFIDENTIAL Forward Looking Statements Forward-Looking Statements This document contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements include, but are not limited to, statements about our proposed acquisition of the gl
Slide 3: Executive Summary
MOSAIC CONFIDENTIAL Executive Summary 3 Visible Cost and Capital Controls Vale Fertilizantes Integration Planning On Track Gradual Recovery in Potash and Phosphate Markets Managing the Business to Maximize Long Term Opportunity
Slide 4: Focused on Items in Our Control
MOSAIC CONFIDENTIAL Focused on Items in Our Control 4 ▪ Ahead of schedule on meaningful cost reduction program: • Q2’17 MOP cash production costs of $77, including $14 of cash brine management expenses* • Q2’17 SG&A at $71 million, down sequentially and year over year Cost Reduction Capital Expendit
Slide 5: Financial Results Review
MOSAIC CONFIDENTIAL Financial Results Review 5
Slide 6: Phosphates Results and Guidance
MOSAIC CONFIDENTIAL Phosphates Results and Guidance 6 GuidanceSecond Quarter 2017 Results Volumes Price Margin 2.3M 2.6M2.6M $320 $340$336 High Single Digits 8% Phosphates Q3 2017 Q3 Sales Volumes 2.2 to 2.5 million tonnes Q3 DAP Selling Price $310 to $330 per tonne Q3 Gross Margin Rate 7 to 9 perce
Slide 7: CF Ammonia Contract Update
MOSAIC CONFIDENTIAL CF Ammonia Contract Update 7
Slide 8: China Phosphate Exports: Higher Level of Uncertainty
MOSAIC CONFIDENTIAL China Phosphate Exports: Higher Level of Uncertainty 8 4 5 6 7 8 9 10 11 12 10 11 12 13 14 15 16 17E Million Tonnes China DAP/MAP/TSP Exports Actual High Forecast Low ForecastSource: China Customs, Mosaic • Exports up YTD • Continue to Expect a Decline in 2017
Slide 9: Potash Results and Guidance
MOSAIC CONFIDENTIAL Potash Results and Guidance 9 Potash Q3 2017 Q3 Sales Volumes 1.9 to 2.2 million tonnes Q3 MOP Selling Price $165 to $180 per tonne Q3 Gross Margin Rate 15 to 18 percent Q3 Operating Rate Low 80 percent* Full Year Sales Volumes 8.1 to 8.6 million tonnes Global Shipments 62 to 63
Slide 10: International Distribution Results and Guidance
MOSAIC CONFIDENTIAL International Distribution Results and Guidance 10 GuidanceSecond Quarter 2017 Results Volumes Margin/Tonne 1.4M 1.7M ~$20 $24 International Distribution Q3 2017 Q3 Sales Volumes 2.3 to 2.6 million tonnes Q3 Gross Margin per Tonne Low $20* Full Year Sales Volumes 6.75 to 7.25 mil
Slide 11: Other Full-Year Guidance
MOSAIC CONFIDENTIAL Other Full-Year Guidance 11 Consolidated Full-Year 2017 Total SG&A $295 to $310 million Capital Expenditures $800 million to $850 million Effective Tax Rate Zero to Slightly Negative Potash 2017 Full Year Canadian Resources Taxes $90 to $110 million Full Year Brine Management Cos
Slide 12: Ma'aden Joint Venture Update
MOSAIC CONFIDENTIAL Ma’aden Joint Venture Update 12 Ammonia Plant Ammonia Plant Sulfuric Acid Plant Beneficiation Plant
Slide 13: Closing Remarks and Appendix
MOSAIC CONFIDENTIAL Closing Remarks and Appendix 13
Slide 14: Global Potash and Phosphate Shipments
MOSAIC CONFIDENTIAL Global Potash and Phosphate Shipments 14 62.8 25 30 35 40 45 50 55 60 65 70 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17E 18F Global Potash ShipmentsMillion Tonnes KCl Source: Company Reports, IFA, CRU and Mosaic 63.5 - 65.5 67.5 25 30 35 40 45 50 55 60 65 70 75 00 01 02
Slide 15: Raw Material Cost Detail
MOSAIC CONFIDENTIAL Raw Material Cost Detail 15 Ammonia ($/Tonne) Second Quarter 2017 Percent Realized in COGS $373 Average Purchase Price $308 Realized in COGS $90 Average Purchase Price $70 Sulfur ($/Tonne) Phosphate Rock (realized in COGS) (‘000 tonnes) U.S. mined rock 4,126 92% Purchased Miski M
Slide 16: Earnings Sensitivity to Key Drivers
MOSAIC CONFIDENTIAL Earnings Sensitivity to Key Drivers(a) 16 (a) These factors do not change in isolation; actual results could vary from the above estimates (b) Assumes no change to KMAG pricing 2017 Q2 Actual Change 2017 Q2 Margin % Actual % Impact on Segment Margin Pre-Tax Impact Quarterly EPS I
Slide 17: Phosphate Raw Material Trends
MOSAIC CONFIDENTIAL Phosphate Raw Material Trends 17 0 50 100 150 200 250 300 350 400 450 500 Q3 2015 Q4 2015 Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017 Q2 2017 Q3 2017F Realized Costs Market Prices 0 25 50 75 100 125 150 175 Sulfur (long ton)(p) Q3 2015 Q4 2015 Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017
Slide 18: Global Potash Shipment Forecasts by Region (August 1, 2017)
MOSAIC CONFIDENTIAL Global Potash Shipment Forecasts by Region (August 1, 2017) 18 Muriate of Potash Million Tonnes (KCl) 2015 2016 2017E Low 2018F High 2018F Comments China 16.4 14.0 15.6 15.8 16.0 Shipments are projected to recover to 15.6 mmt in 2017 (7.5 mmt production plus 8.1 mmt net imports).
Slide 19: Global Phosphate Shipment Forecasts by Region (August 1, 2017)
MOSAIC CONFIDENTIAL Global Phosphate Shipment Forecasts by Region (August 1, 2017) 19 DAP / MAP / NPS* / TSP (Million Tonnes) 2015 2016 2017F Low 2018F High 2018F Comments China 19.8 18.4 18.1 18.1 18.3 Shipments are expected to stabilize at a little over 18 mmt in 2017, with a strong domestic pull